TY - JOUR
T1 - Case-based optimization
AU - Gilboa, Itzhak
AU - Schmeidler, David
N1 - Funding Information:
⁄We are grateful to Ehud Kalai, Jean-Marc Tallon, Nicolas Vieille, and two anonymous referees for stimulating conversations and comments. The first author gratefully acknowledges partial financial support from the Alfred P. Sloan Foundation.
PY - 1996/7
Y1 - 1996/7
N2 - An aspiration level adjustment rule is "realistic" if the aspiration level is (almost always) set to be an average of its previous value and the best average performance so far encountered. It is "ambitious" if the aspiration level is set to exceed the maximal average performance by some constant infinitely often. We analyze a case-based decision maker with a realistic-but-ambitious aspiration level adjustment rule facing a multi-armed bandit repeatedly. Though unaware of the payoff distributions corresponding to the arms of the bandit, the decision maker will asymptotically choose only expected-utility maximizing acts. Journal of Economic Literature Classification Numbers: C6, C61, D7, D72, D8, D81, D83.
AB - An aspiration level adjustment rule is "realistic" if the aspiration level is (almost always) set to be an average of its previous value and the best average performance so far encountered. It is "ambitious" if the aspiration level is set to exceed the maximal average performance by some constant infinitely often. We analyze a case-based decision maker with a realistic-but-ambitious aspiration level adjustment rule facing a multi-armed bandit repeatedly. Though unaware of the payoff distributions corresponding to the arms of the bandit, the decision maker will asymptotically choose only expected-utility maximizing acts. Journal of Economic Literature Classification Numbers: C6, C61, D7, D72, D8, D81, D83.
UR - http://www.scopus.com/inward/record.url?scp=0030191360&partnerID=8YFLogxK
U2 - 10.1006/game.1996.0056
DO - 10.1006/game.1996.0056
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AN - SCOPUS:0030191360
SN - 0899-8256
VL - 15
SP - 1
EP - 26
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 1
ER -